NZX 50 rises to highest in almost 5 years

NEW Zealand's benchmark NZX 50 Index rose to its highest close in almost five years, joining a global rally amid demand for higher yields on optimism that Europe will grant Greece its next rescue tranche.

PGG Wrightson, Vector and Contact Energy gained.

The NZX 50 gained 3.69 points, or 0.1 per cent, to 4012.02, the highest since early January 2008. Within the index, 19 stocks rose, 17 fell and 14 were unchanged. Turnover was about $87 million.

The Dow Jones Industrial Average rose 1.4 per cent on Friday, rounding out a 3.3 per cent weekly gain. In Asia on Monday, Japan's Nikkei 225 Index was 0.7 per cent higher in early afternoon trading.

"It was a big week last week with offshore markets playing risk on," said David Price, a broker at Forsyth Barr.

"It is a global phenomenon where it doesn't pay to be a saver" and that's prompting investors to take on more risk and buy shares.

Vector rose 1.9 per cent to $2.66, recovering from the five-month low reached on Friday. The stock has tumbled in the past two weeks after the company lost its final appeal against the way the Commerce Commission set starting prices for the new regime regulating prices for its monopoly services.

Contact, the biggest utility on the exchange, rose 1.4 per cent to $5.15.

Fletcher Building, the biggest company on the exchange, fell 0.3 per cent to $7.97, having closed above $8 on Friday.

Heartland New Zealand rose 1.5 per cent to 70 cents. The building society said after the market closed that it expects to find out the success of its application for a banking licence before Christmas, having previously anticipated a decision in November.